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IFA stance will not benefit most farmers

Tue, Oct 9, 2012, 01:00

Farmers are objecting to a progressive change in single farm payments that would make a majority better off, writes
FINTAN O'TOOLE

IT IS a truth universally acknowledged that the three most boring things in the world are pensions, the European Union in general and the Common Agricultural Policy (Cap) in particular.

Ask any random Dubliner stuck in traffic today because of the Irish Farmers’ Association demonstration what, exactly, the farmers are protesting about. The answers: (a) don’t know and don’t care – 90 per cent of respondents; (b) the weather – 9 per cent and (c) cuts to EU subsidies – 1 per cent. Perhaps this ignorance is just as well. It might blow people’s minds if they knew the IFA is protesting against something that would make a majority of farmers better off.

Farmers get an annual cheque in the post – the “single farm payment” (SFP) – which brings in about €1.2 billion a year. The European Commission is proposing some changes to the way this money is divvied up. The IFA’s day of action is primarily a protest against these proposals. Most non-farmers, if they pay any attention to the demo at all, will assume that what has the IFA up in arms is a cut to the €1.2 billion.

But that assumption would be entirely wrong.

First, there is likely to be only a very minor cut in Ireland’s overall receipts from the Cap: a loss of about 1.4 per cent which is, in the circumstances of an enlarged EU, a very good result. So the cheques will keep on coming. What’s at issue, though, is to whom they will be coming. The commission wants to change the basis on which entitlement to the subsidies is decided. The €1.2 billion cake will be sliced up somewhat differently; some farmers will gain and some will lose. But the ones who will lose happen to be the ones with the loudest voices in the IFA and the Department of Agriculture.

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The basis on which the payment is allocated is completely bonkers. How much money a farmer receives is determined by how much stock he or she had between 1999 and 2001. This does two things: It locks in historic privilege – if you had a vast ranch in 2001, you’re still getting vast subsidies now; and it skews the entire system towards the best-off farmers – broadly, the more money you have, the more the EU will give you.

Who benefits from this system? The Department of Agriculture has always insisted on keeping the names private, but in 2008, the information commissioner forced the release of the names. At that time, 37 per cent of SFPs were going to the top 10 per cent of farmers. The two biggest earners were Larry Goodman’s Irish Agricultural Development, which received €508,390 in subsidies, and Kepak Farm, which received €346,118. The next eight biggest farm businesses each received subsidies of between €305,000 and €212,000.

The commission is proposing to change this crazy system to a much simpler, fairer and more transparent one. It wants to pay a flat rate for every hectare that’s being farmed. Large farmers will obviously still get more than small ones, but the basis for the subsidy will be the same for everyone. An absurd, opaque and unfair system will be replaced by one that’s much more transparent.

What’s not to like? The problem is that the changes will redistribute income away from the big ranches to family farms, and away from Leinster and Munster towards Connacht and Ulster.

The farm advisory service, Teagasc, did some research on the effects of moving to a flat-rate system. It found, in the words of its director, Gerry Boyle, that “if we were to imagine a line drawn from Carlingford Lough down to the Shannon Estuary, in general the most intensive gainers under the current SFP system lie below this line and the less intensive gainers lie above this line. A ‘flat-rate’ system would see a virtual flip over in terms of gainers and losers. In terms of raw numbers, our research suggests that about 53 per cent would gain and about 47 per cent would lose.”

So a majority of farmers stand to gain from the changes, but they’re mostly in places like Cavan, Monaghan, Donegal, Sligo, Leitrim, Mayo, Roscommon, Longford, Clare and Galway. More recently, Minister for Agriculture Simon Coveney gave the Dáil even starker figures: “Under a national flat rate, although the overall allocation to Ireland would not change, around 76,000 Irish farmers would gain an average of 86 per cent on their current payments, while around 57,000 would lose an average of 33 per cent.”

Yet Coveney is standing with the IFA in opposing changes that would benefit a majority of farmers.

Why? Because the IFA is a brilliant political lobby – so good that even TDs from counties which stand to benefit from the changes keep their mouths shut. Which is fine – provided they stop boring the rest of us with sentimental tosh about how the family farm in the Wesht is the heart and soul of the real Ireland. If there was an EU subsidy for the stuff that comes out of the wrong end of a cow, that verbal slurry would make us all rich.

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